Housing Affordability, Public Policy and Economic Dynamics: An Analysis of the City of Lisbon

Miguel Lorga, João Fragoso Januário and Carlos Oliveira Cruz ()
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Miguel Lorga: Department of Civil Engineering, Architecture and Georesources, Instituto Superior Técnico, Universidade de Lisboa, 1049-001 Lisboa, Portugal
João Fragoso Januário: CERIS, Instituto Superior Técnico, Universidade de Lisboa, 1049-001 Lisboa, Portugal
Carlos Oliveira Cruz: CERIS, Instituto Superior Técnico, Universidade de Lisboa, 1049-001 Lisboa, Portugal

JRFM, 2022, vol. 15, issue 12, 1-12

Abstract: The increasing growth of population living in cities, associated with the commoditization of investment in real estate, has impacted real estate prices and created obstacles for average income families to meet their housing needs. This problem is generalized to virtually all cities, but it has assumed larger proportions in cities where economic activities (tourism, financial services, high-tech industry) have flourished after the financial crisis. Lisbon is one of those cases. The growth of short-term rentals led to an increase in the property prices well above the average income growth, eroding housing affordability. This paper will focus on analyzing Lisbon´s affordability and understanding its main determinants. The analysis is carried out from the compilation and processing of data from 2004 to 2019, in the context of the municipality of Lisbon, using statistical instruments of linear regression in an exploratory and predictive approach. The results suggest a great influence of factors such as tourism, the foreign population with resident status, the propagation of short-term rentals and public policies on the worsening of housing affordability. In view of these conclusions, the preponderance of the type of public policies implemented and their relationship with the most prominent factors on housing affordability is debated.

Keywords: affordability; housing; real estate; Lisbon (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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